Lawmakers Push to Block AI Companies From Selling Americans' Health and Location Data

Bipartisan legislation set to be introduced soon would impose strict limits on who can buy and sell Americans' most sensitive personal information—especially data entered into AI systems.

The Expanding Push for Data Privacy#

Senators Elizabeth Warren and Mary Gay Scanlon are preparing to unveil an updated version of the Health and Location Data Protection Act that directly addresses artificial intelligence. The original bill, introduced in mid-2022, was designed to prevent data brokers from trading in health and location records. The new iteration goes further: it would bar any company—not just brokers—from selling such information to third parties, and it explicitly extends those protections to data typed into AI chatbots like ChatGPT and Claude.

Why AI Companies Are the Focus#

Several major AI labs have begun aggressively building medical products. Elon Musk's xAI publicly encouraged users to upload medical scans to Grok, while OpenAI has launched both ChatGPT Health (a dedicated tool for sharing medical records) and ChatGPT for Healthcare (targeted at providers). Anthropic swiftly responded with Claude for Healthcare, marketed as compliant with healthcare privacy standards. The rapid expansion has raised alarms: users sharing sensitive data with these platforms lack meaningful legal guarantees about how that information will be handled or protected.

The Compliance Gap#

Currently, the safeguards around AI health tools rest almost entirely on company privacy pledges and user agreements. As one legal expert noted, there is no overarching federal privacy framework in the United States despite years of legislative effort. This leaves individuals vulnerable if breaches occur or if companies face pressure to monetize user data.

What the Bill Would Do#

The legislation, co-sponsored by Senators Ron Wyden and Bernie Sanders, would require the Federal Trade Commission to establish enforcement rules within six months. It would grant the FTC, state attorneys general, and individuals themselves the right to pursue legal action for violations. The bill also dedicates $1 billion in funding to the FTC over a decade to strengthen enforcement capacity.

"It's more important than ever that we crack down on data brokers that are raking in giant profits from selling Americans' most sensitive information," Warren said in a statement, adding that the rise of AI data entry makes the protection all the more urgent.